Is New York State Facing a Budget Crisis? We Have Won a Battle, the War Will Be Long and Difficult

Oh, somewhere in this favored land the sun is shining bright,

The band is playing somewhere, and somewhere hearts are light,

And somewhere men are laughing, and somewhere children     shout,

But there is … joy in Mudville—mighty Casey has struck out.

Casey at Bat (edited)

The last week has been incredible, a grassroots campaign of unparalleled passion. The offices of House members overwhelmed with phone calls and faxes, thousands upon thousands of men and women who had never been involved picking up a phone and urging friends to do the same. When the dust settled Speaker Ryan pulled the “repeal and replace” Trump Care bill. Endless finger pointing and blame placing, Trump acolytes hinting that Ryan should be the fall guy; however, who wants to be Henry the VIII’s next wife?

Journalism has been at its best: Read Maureen Dowd in 3/25/17 NY Times.

A battle has been won, the war goes on.The heart and core of the Republican policy is that tax cuts to the wealthy will trickle down and create economic growth with cuts in spending across the board, except for the military and homeland security,  theoretically stimulating the economy. The budget hawks advocate reducing the deficit by cuts in non-discretionary spending. As I have written before, the Adam Smith/Milton Freedman crowd versus the Keynesians. The Republicans are sharply divided, the Freedom Caucus aka, Tea Party, who refuse to compromise one inch versus the run-of-the mill conservatives.

The Trump Care bill may be dead for now; however, the HHC Secretary Tom Price and the Seema Verma the new administrator of Medicare/Medicaid have sweeping powers to direct healthcare policy.  For example, there are twenty plus states, red states, with only one Affordable Care Act provider, without support from Price/Verma it is likely that a number of states will have no providers, and no ACA. Without any formal legislative action millions of Americans will lose healthcare, through a “Repeal” without any “Replace.”

Will the red state voters who lose healthcare blame the Republicans, who were unable to craft a new plan, or, blame the Democrats for defending a plan that ultimately failed (with the active acquiescence of Republicans)?  The 2018 Congressional elections may be twenty-one months away; the campaign is already moving forward.

Part of “Repeal and Replace” was to move $800 billions in healthcare costs from the feds to the states. The only way to pay for a Trump Care plan is to move costs to the states as well as sharply reduce benefits through the rule-making powers of the feds and/or slashing the budget. The Affordable Care Act increased eligibility for Medicaid, 74 million Americans are now covered by Medicaid, one in five Americans. New York State is extremely generous, Alabama spends $8,000 per “elderly and disabled ” person while New York State pays $27,000. As the feds reduce support to the state the more generous states will either have to reduce benefits or pay for the benefits by cutting funds for other areas, perhaps education.

The budgeting process has been broken for years. The inability of the Republicans and Democrats to reach a budget agreement in the past has  led to a process called sequestration.

… sequestration is the employment of automatic, across-the-board spending cuts to reduce annual budget deficits.

We are faced with some iteration of the Trump budget, or sequestration, both incorporate staggering cuts

.Read details about the sequestration process here and here.

As the legislators leave Albany next week satisfied that they have passed a budget, a cloud, a very dark cloud hangs over the state. If the Medicare costs are transferred to the states, if the feds are less generous in supporting Medicare, if federal education dollars are cut, and many, many other state agencies receive fewer federal dollars;  how will the state respond?

It is likely the legislature will return to Albany later in the year. With a governor who sees himself both as a presidential candidate in 2020 and who is running for office in 2018, the special session of the legislature will be crucial. For the 213 state legislators the question always centers around the next election. For some, not all on the right, a Constitutional Convention, which will be on the ballot, may be an opportunity to change the constitution and save dollars. These are dangerous times.

The defeat of Trump Care is a lesson, a lesson in persistence. The question: is the incredible motivation of masses of ordinary people a blip on the radar or the beginning a movement that will sweep into the 2018 election cycle?


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s